May 23, 2008

IPL cricket and the corporate angle

In Outlook Kenneth L Shropshire, director, Wharton Sports Business Initiative, spoke about the IPL owners and their team performance and links with business performance. Interesting to note the differences since businesses often end up mimicking sports (note terms like talent, coaching, superstar players, etc.):

To what extent do the principles of running a business apply to sports?
It is often tough to determine this. The best measure of success is that if you have a team, say the Yankees, which consistently wins, your profits from that team increase as well. At times, teams are criticised for not finishing very high in the rankings; but then some of them are purchased for a very low price too.
How are conflicts between managers and owners or players often resolved?
One way is to see how much profit-sharing there is within the league. Players who do well need rewards, they should be encouraged to do better. But teams within a league also need to be encouraged to compete. That depends on optimal profit-sharing.

What about leagues pushing sportsmen to do more than they are able?

Too much emphasis on performance in sport, where you cross an ethical or legal barrier, is not viewed positively by the public in the US. That's why we're having problems with performance enhancement drugs, steroid use etc.

Related stories here on Outlook website:

What's not that clear is the strategy of using brands to piggyback on the fortunes of a sports team: defeat can have a negative impact on the brand. That's why experts say it's best to just treat it as a standalone business. "Corporate values do apply in the world of cricket; but unlike a regular business, these values do not make the outcome of a match predictable,"